What is Unappropriated Profit?
Unappropriated profit is defined as earnings that are not required in order to pay out dividends to shareholders of the company. Essentially, these earnings may be used in several different ways to strengthen the position of the corporation. Because unappropriated profit is considered to be earned surplus, it is not committed to any budget item, and can be utilized in any manner that is deemed in the best interests of the company. One common use of unappropriated profit is to reinvest the extra funds into the core operation of the company in some manner. These reinvested earnings can take a number of different forms, from upgrading or replacing a piece of equipment to using the funds as seed money for a marketing campaign. The earnings may also be used to benefit the core operation in some other manner, such as paying for manager training courses that are outside the budget, or otherwise enhancing the skill sets of the work force of the company. In other scenarios, a company may choose
